In an interesting interpretation of logic and language, a 2-1 NLRB majority decided that a company “reemployed” illegal strikers by telling them they were locked out when they attempted to return to work. Douglas Autotech Corp., 357 NLRB No. 111 (Nov. 18, 2011).
The United Auto Workers Local 822 (UAW) represented a unit of 146 employees at Douglas Autotech’s Bronson, Michigan plant. The UAW’s contract expired April 30, 2008, and employees struck the next day. Within days, the UAW discovered that although it had served notice to terminate the labor contract, it had failed to file the separate notice of dispute with the Federal Mediation and Conciliation Service (FMCS). As the party initiating bargaining, the union could not lawfully strike until 30 days after the FMCS notice was filed.
The National Labor Relations Act imposes severe consequences on employees who engage in a strike when the union initiating contract termination fails to serve the required notice. Section 8(d) of the NLRA provides:
Any employee who engages in a strike within any notice period specified in this subsection...shall lose his status as an employee of the employer engaged in the particular labor dispute...but such loss of status for such employee shall terminate if and when he is reemployed by such employer.
The UAW, realizing the strike was illegal, told the employees to make immediate unconditional offers to return to work. The company suspected that the union might not have given proper notice, but needed time to investigate that point. Rather than declaring the strikers’ employment at an end, the company announced it was locking out the strikers. Only later did the company confirm that the strike was illegal.
In the meantime the company and the union continued to meet in an effort to settle the dispute. On August 4 – some three months after the strike ended – there was still no agreement, and the company declared all 146 employees discharged because of the “illegal strike.”
NLRB Chairman Pearce and Member Becker ruled that by “locking out” the strikers without expressly reserving the right to treat their employment as forfeited, the company “reemployed” them, reasoning that only employees can be locked out. Further, the company’s statements expressing a desire to resolve the dispute and return the “employees” to work supported a finding that they had been reemployed. The majority also noted the statutory definition of “employee” includes “any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute,” and declared that as the employees had been “locked out” and not discharged, the company must have reemployed them. Finally, 33 employees who were on leave status at the time of the strike were never shown to have participated in the strike at all, and could not be discharged as illegal strikers in any case. All 146 were awarded backpay, unless the company could prove that the lockout would have persisted or could establish when it would have implemented a final offer.
Member Hayes issued a strong dissent. An employer who locks out illegal strikers when they offer to return has not committed to “reemploy” them, nor has their “work ceased as a consequence of” a current labor dispute. Rather, he wrote, their employment ceased in consequence of their illegal strike, they remain unemployed unless or until their employer returns them to active status, or commits in an amnesty arrangement to rehire them. Here, the company did neither; nor should the company’s conditional offers to return the strikers to work upon settlement of the dispute be construed as reemploying them, given that the UAW rejected those proposals.
The opinion sounds a number of cautionary notes for employers involved in labor negotiations. Employers should always determine whether proper notice has been given by the party “initiating” the contract reopener. (Note that this obligation rests only with the party initiating the reopener.) The FMCS will normally confirm whether the required notice has been filed. If proper notice has not been given and the union is the initiating party, employees who strike forfeit their status as employees, and the employer may discharge them with impunity. As this case cautions, however, the employer must promptly terminate the strikers and avoid actions that may create ambiguity as to their status. Employees on leave status cannot be presumed to be participants in the illegal strike. And, once illegal strikers are “reemployed,” all the protections of the NLRA again attach.